are in talks with the Justice Department in an effort to head off an antitrust challenge to their proposed advertising agreement, according to a published report.
The negotiations are at an early stage and it isn't clear whether they will resolve government objections or be acceptable to the two companies, lawyers close to the situation said, the
Wall Street Journal
Investigators also continue to build a lawsuit to block the deal, worried it would give Google too much power in online advertising. And advertisers have raised objections to the Google-Yahoo! deal, which would align the two largest players in Internet advertising.
Under the deal, Yahoo! would be able to place on its Web site certain search ads sold by Google, bringing Yahoo! hundreds of millions of dollars in new revenue in its first year, according to the newspaper.
In the settlement talks with the government, the companies have discussed capping the number of Google ads Yahoo! would use, assurances that Yahoo! would continue to compete in search ads, and a reporting mechanism to ensure compliance, the
reports, citing people close to the talks.
Google and Yahoo! declined to comment on a possible settlement, the
reports. The companies have said they believe the deal as currently structured is pro-competitive and good for consumers.
This article was written by a staff member of TheStreet.com.